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NHS Providers speaks out in support of wholly owned subsidiaries

NHS Providers has reaffirmed its support for Trusts using wholly owned subsidiaries (WOS) to provide services, such as Estates and Facilities, saying that Trusts must not be prevented from using them.


The announcement comes ahead of the broadcast of a BBC 'File on 4' documentary that will examine the reasons why Trusts are turning to this model. 


In an interview for the programme NHS Providers’ Deputy Chief Executive, Saffron Cordery, explains how WOS can deliver a variety of benefits to Trusts, staff, patients and the wider NHS. Speaking ahead of the broadcast, she says: “Trusts set up WOS for many reasons and there is a danger that the criticism levelled at this approach could undermine their legitimate use of this option.


“It is understandable that people will want reassurance on important issues such as staff terms and conditions, and it is important that these are addressed through consultation and dialogue.


“However, in an environment where providers are under enormous pressures, Trusts are right to consider ways in which they can provide services safely and more efficiently.


“This is not a device for privatisation. Many front line leaders tell us WOS allow them to keep services within the NHS family, allowing taxpayers’ money to stay in the system, rather than outsourcing to the private sector or cutting staff or services.


“What we need to do is maximise the benefits of setting up a subsidiary and mitigate the risks, rather than undermine or prevent Trusts from using them.”


WOS are not for profit companies that allow Trusts to retain 100% of the shares, ensuring that the organisation, staff and relevant funding remains within the NHS family.


In a spot poll at the HEFMA Forum in May delegates voted strongly against wholly owned subsidiaries, with 64% saying they were not in favour and 36% voting in favour.


Earlier in the day Simon Corben, Director and Operational Lead, Estates & Facilities, NHS Improvement, had also issued a caution about this course of action. He acknowledged that every WOS application he has seen is slightly different and if a Trust truly believes it can provide better terms and conditions by going down this route that is positive, but, he said, there is a concern over where that leaves the Band 1 and 2 staff. 


There are lots of risks in taking this route and Corben commented that some of the WOS plans he had reviewed seemed not to be driven by the Estates & Facilities department. He confirmed that any proposals would be reviewed with a fine-toothed comb and that he would like to see some proper controls put into the system.


The WOS model is not new; it is widely used in other public sector bodies, including local authorities and the education sector. Some Trusts that have established WOS have already reported benefits in staff recruitment and retention, citing increased flexibility over pay, terms and conditions leading to a greater ability to compete for staff in the local employment market and therefore provide better services to patients.


Unions have focused on the terms and conditions of existing and future staff in their opposition to the WOS.


It is clear that there needs to be a good business case for establishing a WOS. Simon Corben warned delegates at the HEFMA Forum not to even think about the VAT saving angle as a motive, as this would "come back and bite you." 


Click here to listen to or download the BBC podcast.